Background: Chitosan oligosaccharide (COS), a deacetylated derivative of chitin, is an abundant, and renewable natural polymer. COS has higher antimicrobial properties than chitosan and is presumed to act by disrupting/permeabilizing the cell membranes of bacteria, yeast and fungi. COS is relatively non-toxic to mammals. By identifying the molecular and genetic targets of COS, we hope to gain a better understanding of the antifungal mode of action of COS. Results: Three different chemogenomic fitness assays, haploinsufficiency (HIP), homozygous deletion (HOP), and multicopy suppression (MSP) profiling were combined with a transcriptomic analysis to gain insight in to the mode of action and mechanisms of resistance to chitosan oligosaccharides. The fitness assays identified 39 yeast deletion strains sensitive to COS and 21 suppressors of COS sensitivity. The genes identified are involved in processes such as RNA biology (transcription, translation and regulatory mechanisms), membrane functions (e.g. signalling, transport and targeting), membrane structural components, cell division, and proteasome processes. The transcriptomes of control wild type and 5 suppressor strains overexpressing ARL1, BCK2, ERG24, MSG5, or RBA50, were analyzed in the presence and absence of COS. Some of the up-regulated transcripts in the suppressor overexpressing strains exposed to COS included genes involved in transcription, cell cycle, stress response and the Ras signal transduction pathway. Down-regulated transcripts included those encoding protein folding components and respiratory chain proteins. The COS-induced transcriptional response is distinct from previously described environmental stress responses (i.e. thermal, salt, osmotic and oxidative stress) and pre-treatment with these well characterized environmental stressors provided little or any resistance to COS. Conclusions: Overexpression of the ARL1 gene, a member of the Ras superfamily that regulates membrane trafficking, provides protection against COS-induced cell membrane permeability and damage. We found that the ARL1 COS-resistant over-expression strain was as sensitive to Amphotericin B, Fluconazole and Terbinafine as the wild type cells and that when COS and Fluconazole are used in combination they act in a synergistic fashion. The gene targets of COS identified in this study indicate that COS’s mechanism of action is different from other commonly studied fungicides that target membranes, suggesting that COS may be an effective fungicide for drug-resistant fungal pathogens.